Understandably, it hasn’t been the best time for CPG food and beverage processors to unveil new products to retail customers or their consumers. Yet it doesn’t have to bring an end to strategic innovation—involving insights, ideation or product development.
Last month saw McKinsey & Company release a corporate finance practice report titled, “Innovation in a crisis: Why it is more critical than ever.” The piece included survey findings from more than 200 organizations across industries. Not surprisingly, McKinsey found most companies are de-prioritizing innovation to concentrate on shoring up their core business; pursuing known opportunity spaces; conserving cash and minimizing risk; and waiting until “there is more clarity.”
In contrast, however, McKinsey suggests there are still more urgent actions to consider. These include …
… adapting the core to meet shifting customer needs;
… identifying and quickly addressing new opportunity areas being created by the changing landscape;
… reevaluating the innovation initiative portfolio and ensuring resources are allocated appropriately; and
… building the foundation for post-crisis growth in order to remain competitive in the recovery period.
For its part, McKinsey recommends a sequential series of eight innovation steps, starting with “Discover” and “Evolve.”
“The market context during a crisis is dynamic, with little certainty about what will define the world when things stabilize,” says McKinsey. “Having a powerful approach to analyzing this type of landscape requires the ability to Discover. It is critical for companies to over-invest in rediscovering what matters to customers now and understanding the impact those changing needs will have on their business.”
The second point is to evolve.
“Today, countless companies are seeing dramatic shifts in their profit pools and the economics that support their operations. Crises like the one we are living through today are watershed moments for companies to evolve,” says McKinsey. “Successfully managing a business model shift first requires determining which aspects of the model have been impaired and are unlikely to return.”